Tuesday, July 9, 2013

Wal-Mart: "For" or "Against"

As the largest
American multinational retailer corporation, the biggest private employer in
the world with 2.2 million employees, Wal-Mart Stores, Inc., or Walmart, has
been running chains of large discount department stores and warehouse stores
since 1962 (incorporated in 1969). Company is controlled by the Walton family
with 48% stake in it. It is also the U.S. largest grocery retailer and the world's third largest public
corporationafter Exxon
Mobil and Royal Dutch Shell. By the end of 2012 Walmart had 8,500 stores under
55 different names in 15 countries and is currentlydevelopping
strategies for growththrough the
next 20 years. The company is proud of its strategy and even incorporates it
within its moniker "Always Low prices, Always." While company's
business in United Kingdom, South America, and China is going very well, German
and South Korean ventures were unsuccessful.

Walmart is not
the only store criticized for its policies, but it has become a symbol for much
of what is wrong with employers. For the fiscal year ending in January 2011,
Walmart reporteda net income
of $15.4 billion on $422 billion of revenue. It's obviously a lot of
money to justify some questionable workplace practices; however, stories
persist about wage law violations, inadequate health care, exploitation of
employess, and the retailer's anti-union position. Some5,000
lawsuits are filed against the company each year. Walmart is facing
an enormous wave of negativity - from community activists trying to keep big
retailer away from their neighbourhoods, to local governments mandating that
Wal-Mart supply workers with health insurance, to opportunistic lawyers trying
to get rich by bringing on endless lawsuits, to labor unions, grassroots
organizations, religious organizations, environmental groups, and customers of
course. Company is being accused in racial and gender discrimination,
mistreating illegal aliens, denying overtime pay. Criticism also includes the
corporation's foreign product sourcing, treatment of suppliers, compensation
and working conditions, environmental practices, the use of public subsidies,
and the company's security policies.

PEST analysis
can help to define the areas of Walmart's concern which are important and
necessary to activate immediately. This analysis also reveals the positive or
negative affects to their business according to some factors. In political
sphere, corporation is affected by policies on economy and trading agreements,
such as NAFTA. Economically, unemployment rate and slightly increase in consumption
are likely to influence Walmart. The U.S. government is planning to decrease
the amount of supercenters to leverage capital assets through increase in
returns and sales across the country. In socio-cultural terms company is
affected by the faster pace of life where efficiency is the key. Social
infuence pushes consumers to shop at Walmart to the point where it becomes a
trend to use one stop service. Walmart uses IT technologies and online shopping
opportunities for the core purpose of marketing, they rely on social media for
advertising and selling their products.

There are many
groups and individuals who have a stake in what Walmart does, the market and
non-market stakeholders are among them. The first ones include the
stockholders, company's executives, employees, consumers, non-profit
organizations, online and gasoline retailers, and commuities where Walmart is
located. Non-market stakeholders have a non-economic or political stake in what
course the company takes, they are labor unions, international retail stores,
and politicians. In public, Walmart uses top of the line Public Relations
strategy firms to produce commercials for its stores and to portray the best
possible image. Its relationships with key stakeholders are maintained as well
by the communication of corporate statements on its Internet site and through
other paper based corporate communications. Walmart's public message is
consistent, and has been so over time. The core message is that Walmart is a
"family friendly" store, and that it is good to its customers, and
that it is an asset to the local community. The messages of selling for less,
respecting employees and communities, and expanding are all echoed in company's
Annual Reports.

According to
company's reports, their sales continue to improve, but different measures of
public opinion indicate that their reputation declines, which affects both
ability to reach new shoppers and to build new stores. In order to further
increase sales the company must either sell more products to existing customers
or identify new ones. Recent public opinion surveys indicate that although
people are shopping there, they are not happy about it because of Walmart's
poor business practices. The Harris Interactive survey found that shoppers
consider company's labor practices above all other social responsibility
issues. In 2008,The
Reputation Instituteranked the 150
largest U.S. companies based on "the overall trust, esteem, admiration and
good feelings consumers have toward them." Walmart came in at number 136
out of 150 companies, dropping 76 places from number 57 in 2007.Walmart
Watch 2007 Public Opinion Surveyindicates the
drop by 5% in overall favourability, 27% of respondents developed a more
negative opinion on the company. It's clear enough that Walmart needs more than
a logo or an advertising campaign to fix the situation.

After all this, we may be curious to
see how Walmart's social media strategy addresses its online brand reputation
issues. While being perceived as an "evil empire" by some, company
does a lot of good for its communities and the world, for example providing
2,450 truckloads of supplies to Hurricane Katrina victims and donating more
than $2 million to end world hunger. The brand developed the
strategy to share corporate news and build public goodwill by sharing
information about how Walmart is helping society. They created multiple Twitter
handles, each targeting a different audience with the information and messages
that pertain to them. Walmart's Director of Social Media, Umang Shah, also
implemented a way to monitor social media conversations almost around the clock
so that questions and issues addressed in social media are addressed as soon as
possible. Before implementing that strategy company analyzed data by utilizing
Social Flow tool. Additionally, Shah stated that engagement online could
be bought, but the true value of the content and the way of engagement is told
by how much succeed without paying for it. Walmart constantly updates its
Facebook feed, and created pages for each store across the nation. As was noted by
Wanda Young, Vice President of Media and Digital Marketing for Walmart,
company's marketing team asks questions to engage its customers on Facebook,
and uses the answers to change the way it does business. Walmart understands
the importance of building relationships with customers through social media
platforms, let's see where this path full of controversy and negativity
will take them...